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Acknowledgment and Refusal Procedures

Each Settling Bank that is the designated Settling Bank for another Participant or for other Participants must use the Settling Bank Acknowledgment function to perform acknowledgment activities promptly after final figures have been posted and by the Acknowledgment Cutoff Time. Once the message 'Final Figures' appears on the Settlement screen, each Settling Bank that settles for other Participants should access the Settling Bank Acknowledgment function and take one of the following actions:

  1. Acknowledge its entire net-net settlement balance, or
  2.  Refuse to settle for one or more other Participants for which it is the designated Settling Bank.  

Subject to Item 7 and Item 9 below, if a Settling Bank that settles for other Participants does not, by the Acknowledgment Cutoff Time (i) affirmatively acknowledge its net-net settlement balance or, alternatively (ii) notify DTC that it refuses to settle for one or more Participants for which it is the designated Settling Bank, then, at the Acknowledgment Cutoff Time, the Settling Bank is deemed to have acknowledged its net-net settlement balance.  If the net-net settlement balance is a debit, then the Settling Bank’s Fed account will be charged; if the net-net settlement balance is a credit, then the Settling account will be credited. 

The following additional procedures also apply to the acknowledgment and refusal process:

  1. A settling Bank that settles for other Participants must acknowledge its net-net settlement balance or refuse to settle for one or more other Participants for which it is the designated Settling Bank by the Acknowledgment Cutoff Time, but cannot refuse to settle for itself.
  2. A Participant that is a Settling Bank only for itself (and not for any other Participant) need not acknowledge its balance and cannot notify DTC that it refuses to settle.
  3.  A notification to DTC by a Settling Bank of the Settling Bank’s refusal to settle for a Participant for which it is the designated Settling Bank is a refusal to settle all settlement obligations of that Participant (including the Participant's main account and all subaccounts thereunder).
  4. After a Settling Bank notifies DTC of its refusal to settle for one or more Participants for which it is the designated Settling Bank, DTC extracts from the net-net settlement balance of that Settling Bank the net balance(s) of the Participant or Participants for which the Settling Bank  has refused to settle, and provides the Settling Bank with an adjusted settlement statement reflecting the Settling Bank’s adjusted net-net settlement balance (the “Post-Refusal Adjusted Balance”).  The Settling Bank’s response to provide an acknowledgement of the Post-Refusal Adjusted Balance is immediately required.
  5. Subject to Item 7 and Item 9 below, if a Settling Bank that has been provided with a Post-Refusal Adjusted Balance does not immediately affirmatively acknowledge its Post-Refusal Adjusted Balance, then, the Settling Bank is deemed to have acknowledged its Post-Refusal Adjusted Balance.  If the Post-Refusal Adjusted Balance is a debit, the Settling Bank’s Fed account will be charged; if the Post-Refusal Adjusted Balance is a credit, the Settling Bank’s Fed account will be credited.
  6. If, after the initial release of final settlement figures, a Settling Bank’s net-net settlement balance is adjusted by DTC for any reason other than as a result of a Settling Bank’s refusal to settle on behalf of a Participant for which it is the designated Settling Bank, then the Acknowledgment Cutoff Time for that Settling Bank would change to become 30 minutes after DTC advises the Settling Bank of the adjusted net-net settlement balance.
  7. If a Settling Bank cannot (i) by the Acknowledgment Cutoff Time, send an acknowledgment or refusal instruction, or (ii), if applicable, send an immediate acknowledgment of the Post-Refusal Adjusted Balance, to DTC then it must immediately contact DTC using the Settlement Hotline at (212) 855-5800. If a Settling Bank complies with this Item 7, then it will not be deemed to have acknowledged its balance.  If the problem is due to a connectivity issue with DTC, DTC Settlement Operations may then direct the Settling Bank to submit its acknowledgement/refusal instruction via e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it., or as otherwise specified by DTC at that time.
  8. In order to facilitate timely processing of the NSS File, DTC maintains its discretion to exclude a Settling Bank’s balance from the NSS File, and proceed with NSS settlement, if the Settling Bank does not acknowledge its net-net settlement balance by the Acknowledgment Cutoff Time, or if the Settling Bank has provided a refusal, does not immediately acknowledge its Post-Refusal Adjusted Balance, as applicable.  If a Settling Bank’s debit balance is excluded from the NSS File, then, the Settling Bank must pay it via Fedwire® in accordance with the instructions provided below.
  9. For a Settling Bank that is the designated Settling Bank for other Participants, DTC will attempt to contact the Settling Bank if (i) no acknowledgment or notice of a refusal to settle on behalf of one or more Participants for which it is designated as the Settling Bank is received by the Acknowledgment Cutoff Time, (ii) if applicable, the Settling Bank has failed to respond to DTC to acknowledge its Post-Refusal Adjusted Balance, or (iii) the Settling Bank has not contacted DTC in accordance with Item 7 above.  If (x) DTC is able to contact the Settling Bank, and (y) the Settling Bank notifies DTC that it cannot, at that time, acknowledge or refuse its net-net settlement balance or acknowledge their Post-Refusal Adjusted Balance, as applicable, then the Settling Bank will not be deemed to have acknowledged its net-net settlement balance or Post-Refusal Adjusted Balance, as applicable.  If the Settling Bank cannot be reached, the Settling Bank will be deemed to have acknowledged its net-net settlement balance or Post-Refusal Adjusted Balance, as applicable.  

DTC uses the most recent contact information provided by the Settling Bank to DTC.   Each Settling Bank must ensure that it maintains up-to-date and accurate contact details with DTC to facilitate DTC’s ability to contact a Settling Bank regarding settlement issues.  A Settling Bank must promptly provide its DTC Relationship Manager with up-to-date and accurate contact details for this purpose on an ongoing basis when previously provided contact details are no longer accurate.  

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